20. Total Liabilities21. Bonds Payable22. Amount of Ordinary Shares outstanding23. Premium on Ordinary Shares 1.The Cost of Sales during the period is equal to 65% of net sales. This resulted to a gross profit of P1,050,000.2.Selling expenses are 15% of net sales, while net income is 5% of net sales.3.Quick assets are composed of cash, Marketable Securities and Accounts Receivable. The ratio of cash to Marketable Securities is 1:3, whileMarketable Securities to Accounts Receivable is 1.2.4.Total Quick Assets is twice as the Current Liabilities, while the ratio of total current assets to total current liabilities is 3:1.5.The Accounts Receivable turn-over and the inventory turn-over are the same at 5 times, while total assets turn-over is once a year.6.The company has an intangible assets the amount of which is P1 for every P20 of the total assets.7.Accounts payable is 150% of Accounts Receivable8.The ratio of shareholders' equity to working capital is 1.6.9.The Land, Building and Equipment at net is 2/3 of its cost.10. The bond interest is earned 2 times a year.11. The earning per share of ordinary shares is P10 per share. The ordinary shares have a par value of P50. The shares were issued at 20% above parvalue, while the preferential shares which offers 8% dividends and a par value of P50 were issued at P55 per share.12. For the immediate past year, a P10,000 dividends was paid to preferential shareholders and the same amount will be paid for the current year.13. It has been the practice of the company to purchase and sold their products on account.From the above financial relationships, compute the amount of following:

Ratio analysis is done to analyze the financial performance of the company. For the given question…

Answered: 20. Total Liabilities 21. Bonds Payable…

Business

Accounting

20. Total Liabilities 21. Bonds Payable 22. Amount of Ordinary Shares outstanding 23. Premium on Ordinary Shares

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 56P: The following selected information is taken from the financial statements of Arnn Company for its...

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A: Answered:

Question

20. Total Liabilities
21. Bonds Payable
22. Amount of Ordinary Shares outstanding
23. Premium on Ordinary Shares

1.
The Cost of Sales during the period is equal to 65% of net sales. This resulted to a gross profit of P1,050,000.
2.
Selling expenses are 15% of net sales, while net income is 5% of net sales.
3.
Quick assets are composed of cash, Marketable Securities and Accounts Receivable. The ratio of cash to Marketable Securities is 1:3, while
Marketable Securities to Accounts Receivable is 1.2.
4.
Total Quick Assets is twice as the Current Liabilities, while the ratio of total current assets to total current liabilities is 3:1.
5.
The Accounts Receivable turn-over and the inventory turn-over are the same at 5 times, while total assets turn-over is once a year.
6.
The company has an intangible assets the amount of which is P1 for every P20 of the total assets.
7.
Accounts payable is 150% of Accounts Receivable
8.
The ratio of shareholders' equity to working capital is 1.6.
9.
The Land, Building and Equipment at net is 2/3 of its cost.
10. The bond interest is earned 2 times a year.
11. The earning per share of ordinary shares is P10 per share. The ordinary shares have a par value of P50. The shares were issued at 20% above par
value, while the preferential shares which offers 8% dividends and a par value of P50 were issued at P55 per share.
12. For the immediate past year, a P10,000 dividends was paid to preferential shareholders and the same amount will be paid for the current year.
13. It has been the practice of the company to purchase and sold their products on account.
From the above financial relationships, compute the amount of following:

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